Lockdown – be ready for the unexpected
One of the more insidious effects of the coronavirus outbreak is its unpredictability.
Businesses need to plan. To achieve this there needs to be an underlying, stable economic platform. Lockdown - whether locally or nationally applied - removes the certainty required to achieve planned results.
For example, the recent attempts to relax distancing rules and allow hospitality businesses (pubs, restaurants, hotel etc) to reopen on a restricted basis has back-fired in certain areas and the ... read more
Want to start your own business?
One of the consequences of recession, such as the present downturn in activity caused by the Coronavirus outbreak, is the likelihood that many will face redundancy as employers try to manage the process.
In the past, this shake out process seems to reawaken dreams of not placing all your income eggs in one basket and instead, dusting-off those long-desired plans to run your own business.
There are sound reasons for doing this. For example, a business with 100 customers has 100 separate sources ... read more
Tax and company cars
Most employers and employees are aware of the additional costs of providing company cars and the tax implications they create. However, for many employees the lure of having a company car means that this remains a very popular option. There are some circumstances where it can be possible to offer employees car benefits that are exempt from tax.
Cars available for business journeys only
To avoid reporting for car benefit or car fuel benefit, the car should only be available to ... read more
Why use the VAT Cash Accounting Scheme
Under standard VAT accounting, you pay VAT on your sales regardless of whether your customer has paid you. Under the Cash Accounting Scheme, VAT does not need to be paid over until your customer has paid your invoice.
Your business can enter this scheme provided your estimated VAT taxable turnover for the next VAT year is not more than £1.35 million. You can continue to use the scheme until the VAT taxable turnover exceeds £1.6 million.
Using cash accounting may help your cash flow, especially ... read more
Tax consequences if income exceeds £100,000
If your income is expected to exceed £100,000 for the first time, we would like to remind you of the effect this can have on your personal allowance and marginal tax rate.
If you earn over £100,000 in any tax year your personal allowance is gradually reduced by £1 for every £2 of adjusted net income over £100,000 irrespective of age. This means that any taxable receipt that takes your income over £100,000 will result in a reduction in personal tax allowance. Your adjusted net income is your ... read more
Reporting gains on residential property
The Capital Gains Tax (CGT) reporting and payment date for UK residents that sell certain residential property changed from 6 April 2020. This change meant that any CGT due on the sale of a residential property needs to be reported and a payment on account of any CGT due made within 30 days of the completion of the transaction.
In practice, this change will only apply to the sale of a residential property that does not qualify for Private Residence Relief (PRR). The PRR relief applies to ... read more
Calculating Adjusted Net Income
Calculating the adjusted net income amount is necessary if any of the following apply:
A taxpayer is liable to an income-related reduction to the personal allowance when their adjusted net income is over £100,000 (regardless of their date of birth);
A taxpayer that is liable to the high income child benefit charge where they have an adjusted net income above £50,000.
In order to work out adjusted net income, you need to look at a taxpayer’s total taxable income before personal allowances ... read more
Reminder of who can claim SEISS
The Self-Employment Income Support Scheme (SEISS) was extended for a second and final three-month period from 1 June to 31 August 2020. The maximum grant available for the three-months is £6,570 (Previous quarter £7,500) paid in a single instalment. The application process for the SEISS extension will open from 17 August. Claims for the first quarter (1 March - 31 May 2020) closed on 13 July 2020.
The second grant will be open to self-employed individuals or members of a partnership whose ... read more
Why make voluntary NIC contributions
In many circumstances it can be beneficial for taxpayers to make voluntary Class 2 National Insurance Contributions (NICs) to increase their entitlement to benefits, including the State or New State Pension if they are self-employed.
Taxpayers might want to consider making voluntary NICs because:
They are close to State Pension age and do not have enough qualifying years to get the full State Pension
They know they will not be able to get the qualifying years they need to qualify for the ... read more
HMRC credit card fees
New credit card fees for paying HMRC are to be introduced from 1 November 2020. These changes will mean that HMRC will be able to charge anyone using a business debit card a fee for making certain payments.
The fee for using a business debit card from 1 November 2020 is difficult to calculate but is essentially comprised of three elements. These are the merchant acquirer fee, the interchange fee and the scheme fee. The charge is designed to cover the costs incurred by HMRC in accepting payment ... read more